Building Business Resilience to Disasters

Yutaro Izumi, Hiroyuki Nakata, Yasuyuki Sawada and Kunio Sekiguchi
Additional contact information
Yutaro Izumi: National Graduate Institute for Policy Studies
Kunio Sekiguchi: Ministry of Economy, Trade and Industry.

No CIRJE-F-1223, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper studies the impacts of natural disasters on corporate disaster risk man- agement. Using unique plant-level data from Thailand collected after the 2011 floods, we find that inundation/direct loss experience stimulates flood risk awareness and encourages plants to develop a business continuity plan (BCP), but indirect loss expe- rience does not. We also find evidence consistent with the existence of nonnegligible fixed costs in BCP development. Furthermore, subscription to flood insurance amongst plants with inundation/direct loss experience dropped after the floods, suggesting that a BCP acts as a critical substitute for insurance as part of disaster risk management strategies.

Pages: 51 pages
Date: 2024-03
New Economics Papers: this item is included in nep-env and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2024cf1223

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